Toronto Criminal Lawyer

Fraud is one of the most commonly charged criminal offences in Ontario, and its consequences range widely depending on the value of the fraud and the circumstances of the offence. When the value of the fraud exceeds $5,000, the offence becomes significantly more serious. And when the value exceeds $1 million, a mandatory minimum sentence of two years imprisonment applies — one of the few mandatory minimums for a property offence in the Criminal Code.

Understanding how fraud charges are structured, what penalties apply, and what factors influence sentencing is essential for anyone facing these charges or seeking to understand how Ontario courts approach financial crime.

Fraud Offences Under the Criminal Code

Fraud is defined in section 380(1) of the Criminal Code. The offence is broad and captures any dishonest act — including deceit, falsehood, or "other fraudulent means" — that deprives another person of property, money, valuable security, or any service. Unlike theft, fraud does not require that the accused physically take something; it can involve inducing someone to part with their property through deception or manipulation.

The Criminal Code distinguishes between fraud based on the value involved:

• Fraud over $5,000 — An indictable offence carrying a maximum sentence of 14 years imprisonment. When the value exceeds $1 million, a mandatory minimum of two years imprisonment applies under section 380(1)(a).
• Fraud under $5,000 — A hybrid offence that can be prosecuted by indictment (maximum two years imprisonment) or by summary conviction (maximum two years less a day). There is no mandatory minimum for fraud under $5,000.

The $5,000 threshold is a critical dividing line. Fraud over $5,000 is always prosecuted as an indictable offence, meaning it will be treated more seriously at every stage of the proceedings — from bail to sentencing.

The $1 Million Mandatory Minimum

Section 380(1)(a) of the Criminal Code imposes a mandatory minimum sentence of two years imprisonment where the total value of the fraud exceeds $1 million. This provision was introduced in 2011 through the Standing Up for Victims of White Collar Crime Act and reflects Parliament's view that large-scale fraud — which can devastate individuals, families, and communities — warrants a significant custodial response.

The mandatory minimum means that the sentencing judge has no discretion to impose a sentence shorter than two years for fraud over $1 million, regardless of the offender's personal circumstances, their lack of a criminal record, or any other mitigating factors. Two years is the floor, not the ceiling — and in practice, sentences for major fraud are often considerably longer.

The constitutionality of this mandatory minimum has been considered by courts in Ontario and elsewhere. To date, the provision has generally been upheld, although the broader debate about mandatory minimum sentences in Canada continues. Courts have held that the severe consequences of large-scale fraud — financial ruin for victims, loss of life savings, destruction of trust — justify a significant minimum custodial sentence.

Sentencing Factors in Fraud Cases

When sentencing for fraud over $5,000, the court considers a wide range of factors. Section 380.1 of the Criminal Code sets out specific aggravating factors for fraud, in addition to the general aggravating and mitigating factors found in section 718.2. The statutory aggravating factors for fraud include:

• The magnitude, complexity, duration, or degree of planning of the fraud
• The impact on the victims, including their financial circumstances and vulnerability
• The offender's status or reputation in the community, if the offence involved an abuse of a position of trust or authority
• Failure to comply with a licensing requirement or professional standard
• Concealing or destroying records related to the fraud

Additional factors the court will consider include:

• Restitution — Whether the offender has made restitution to the victims, or has the ability and willingness to do so. Restitution is a significant mitigating factor, though it cannot offset the mandatory minimum where it applies.
• Criminal record — A first-time offender will generally receive a less severe sentence than someone with a history of dishonesty offences.
• Guilty plea — An early guilty plea is treated as a mitigating factor, as it spares witnesses (including victims) from testifying and demonstrates acceptance of responsibility.
• Role in the offence — In cases involving multiple participants, the offender's level of involvement and role in planning and executing the fraud is relevant. A mastermind will generally receive a harsher sentence than a peripheral participant.
• Personal circumstances — The offender's age, health, family responsibilities, and prospects for rehabilitation are considered, though their weight diminishes as the severity of the fraud increases.

Common Types of Fraud Over $5,000

Fraud takes many forms, and the cases that come before Ontario courts reflect this diversity. Some of the more common types include:

• Investment fraud — Ponzi schemes, fraudulent investment funds, and misrepresentation of investment opportunities. These cases often involve multiple victims and can reach into the millions of dollars.
• Mortgage fraud — Falsification of income documents, inflated property appraisals, or straw buyer schemes used to obtain mortgage financing. These cases frequently involve multiple properties and multiple participants.
• Insurance fraud — Staged accidents, inflated claims, or fabricated losses. Insurance fraud is aggressively investigated by insurers and prosecuted by the Crown.
• Employee theft and embezzlement — Trusted employees who steal from their employers over extended periods. The breach of trust is a significant aggravating factor at sentencing.
• Government benefit fraud — Fraudulent claims for social assistance, employment insurance, disability benefits, or tax refunds.
• Identity fraud — Using stolen personal information to obtain credit, open accounts, or make purchases. Identity fraud cases can involve significant financial loss to the victims and substantial complexity in the investigation.

Restitution and Victim Impact

Fraud cases often involve significant victim impact. Unlike many other criminal offences, the harm in fraud cases is primarily financial — but that financial harm can be devastating. Victims of fraud may lose their retirement savings, their homes, their businesses, or their ability to support their families. Elderly victims and vulnerable persons are disproportionately affected.

Section 738 of the Criminal Code allows the court to order restitution as part of the sentence. A restitution order requires the offender to pay compensation to the victim for financial losses resulting from the offence. In fraud cases, the restitution amount can be very large. A restitution order is enforceable as a civil judgment, meaning the victim can use civil enforcement mechanisms (such as wage garnishment or liens on property) to collect the amount owed.

In addition to restitution, the court may impose a fine in lieu of forfeiture under section 462.37 of the Criminal Code, where the proceeds of the fraud have been dissipated and cannot be recovered. Victim surcharges may also apply.

Victim impact statements are common in fraud cases and can be powerful. The court will hear directly from victims about the financial and emotional consequences of the fraud. These statements can significantly influence the sentence, particularly in cases involving vulnerable victims or where the fraud caused lasting harm beyond the immediate financial loss.

Defending Fraud Charges

Fraud charges can be defended on several grounds, depending on the facts of the case. Common defence strategies include:

• Lack of dishonesty — The Crown must prove that the accused acted dishonestly. A good-faith business transaction that goes wrong is not fraud, even if someone loses money. The distinction between a failed business venture and a fraudulent scheme can be the central issue at trial.
• Lack of deprivation — The Crown must prove that the complainant was actually deprived of something. If no financial loss occurred, the fraud charge may fail.
• Identity and participation — In complex fraud schemes involving multiple participants, the Crown must prove the accused's specific role. Being associated with a fraudulent enterprise does not automatically make a person criminally responsible for its activities.
• Charter issues — Fraud investigations often involve search warrants, production orders, and other investigative techniques that must comply with the Charter. Evidence obtained through unconstitutional means may be excluded.

For more information about theft and fraud charges in Ontario, see our dedicated resource page. Understanding the full range of options — from challenging the charges at trial to negotiating a plea resolution — requires experienced legal counsel who can assess the strength of the Crown's case and develop an appropriate strategy.

If you are facing fraud charges, the stakes are high — particularly where the value exceeds $5,000 or $1 million. Early legal advice is critical. Contact our office to arrange a confidential consultation and discuss your options.